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ECB Holds Rate, QE Unchanged


The European Central Bank left its interest rates unchanged on Thursday and maintained the forward guidance on monetary stimulus for a second policy session in a row, after the Governing Council's June decision to halve the monthly asset purchases after September, and to eventually end them in December.

The main refi rate is currently at a record low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate is 0.25 percent.

The Governing Council, led by Mario Draghi, "expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 percent over the medium term," the ECB reiterated in a statement.

The bank also retained its guidance for its asset purchases.

"The Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of EUR 30 billion until the end of this month," the ECB said.
In June, the ECB announced that it hopes to halve its monthly bond purchases to EUR 15 billion after September and to end them in December.

The latest policy decision was in line with economists' expectations.

An end to asset purchases will be "subject to incoming data confirming the Governing Council's medium-term inflation outlook", the bank reaffirmed.

The ECB said it intends to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases.

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